Opinion: Luxon's embarrassing coalition negotiations

NZ First leader Winston Peters, National's Christopher Luxon and Act's David Seymour in coalition...
NZ First leader Winston Peters, National's Christopher Luxon and Act's David Seymour in coalition negotiations. Photo: Supplied
Incoming Prime Minister Christopher Luxon is now being openly mocked and ridiculed by political commentators for his failure to achieve a coalition government. There are certainly signs that Luxon hasn’t managed the process well, and raising questions about competency at this early stage is a poor start to government.

The most savage criticism of Luxon is coming from the political right. Today rightwing political commentator and former National Beehive staffer Matthew Hooton has a scathing column in the Herald giving his account, obviously based on insider leaks, of how the negotiations have unfolded. Hooton paints a picture of National’s negotiations as a failure, caused by Luxon’s arrogance and hubris.

Hooton records Luxon’s criticisms immediately after the election of how previous prime ministers have conducted coalition negotiations and his claims that “I’ve done a lot of mergers and acquisitions”. With the exception of the Air New Zealand-Virgin alliance that broke up when he was chief executive, there is little evidence of any other mergers Luxon worked on in his business career.

Despite boasting of his business experience and relationship-building skills, Hooton says the National leader has astounded those involved in the negotiations by his cackhandedness.

After apparently not achieving much of the promised progress in the three-week period before final results came in, Hooton reports that the presumptive PM then entered talks without bothering to take his coalition partners seriously. Hooton reports, “Act, NZ First and National insiders say Luxon is a talker rather than a listener. He never asked how Act or NZ First thought negotiations should proceed, or what they wanted from them.”

Newstalk ZB’s Heather du Plessis-Allan has also criticised Luxon’s management of the negotiations, pointing out on Monday that only the 1996 MMP coalition negotiations have taken longer: “That’s embarrassing for Chris Luxon. Because he’s the guy who’s talked up his negotiating skills, given he’s done a lot of mergers and acquisitions. And he’s the guy who set the deadline of wrapping this up in time for him to go to Apec.”

Why is this important? First impressions matter, and du Plessis-Allan suggests that Luxon and National’s reputation is suffering: “The start of a Government is a really important period. It sets up voters’ expectations for the first term, that’s why governments often write up 100-day plans. Because they want to create a sense of urgency and give the impression they’re changing things fast. Literally the opposite of that is happening right now. There is no sense of urgency, nothing’s changing fast, there’s no momentum.”

Why the rush? Danyl McLauchlan explains today in the Listener that Luxon “promised to introduce a mini-Budget by Christmas and he’s running out of runway to get that done. They want their ministerial offices staffed and running but they can’t hire anyone because they don’t know who has what portfolio. They’re wasting crucial time.”

McLauchlan says the speed of the negotiations “will be driving Luxon wild with frustration” but Winston Peters will be entirely comfortable: “For Peters these negotiations – the tactics, the games, the stalling, the triumphs – are the quintessence of politics.”

He also points out that, although Peters cannot leverage the threat of supporting Labour instead: “He’s demonstrating his power over his larger coalition partners, making them come to him. He is the most important person in the country, the absolute centre of attention. And he will go on like this: he always does.”

Luxon has, according to commentators, failed to grasp the power NZ First and Act have in the negotiations. He has assumed they are captive negotiators who will essentially have to agree to whatever he offers them. Hence there have been reports of low-ball offers that both Act and NZ First have been dismissive of, if not offended by.

Seymour and Peters have outmanoeuvred Luxon, not only because they have shown they are willing to work together, but because Luxon has failed to realise that the minor parties can walk away from the negotiations, causing a new election or forcing National to form a minority Government that would be even more reliant on them.

As Hooton points out today, the pressure is on Luxon to produce a deal: “It is he who must close a deal before Christmas or there will be new elections. Seymour and Peters can quite happily walk away, leaving Luxon to form a minority Government that would need to win their agreement issue by issue. If anything, Seymour and Peters would be more powerful if not limited by a coalition agreement and the decaying but still burdensome rules of Cabinet confidentiality and collective responsibility. Seymour and Peters understood this all along. Luxon needs them if his Government is not to be a complete circus, with the clown show of the past five weeks being repeated whenever it wants to do anything contentious. Seymour and Peters don’t need him at all.”

Does this suggest Luxon will prove to be a weak Prime Minister? Leftwing political commentator Chris Trotter thinks so, arguing Luxon’s poor negotiating skills only illustrate how little power he has, and essentially Luxon now looks like “an inexperienced numpty”.

Writing for Newstalk ZB today, Trotter suggests Luxon has overplayed his hand: “Placing insultingly meagre first-offers before such men might be survivable if Luxon had come to the table, as Key did in 2008, with 45 per cent of the party vote. Turning up with this election’s 38 per cent is nowhere near so impressive.”

Trotter argues the troubled negotiations should remind the public just how poorly Luxon has performed since becoming National leader, especially compared to the likes of his mentor John Key. On becoming leader, Key made audacious raids into Labour constituency and ideologies by first visiting poor parts of Auckland and then helping Sue Bradford get her “anti-smacking bill” passed.

Luxon’s record is derisory by comparison, and in his first big test all that he has achieved is the own-goal of uniting David Seymour and Winston Peters in a negotiating bloc against him. And Trotter agrees they now hold the winning cards, and Luxon is under pressure to capitulate: “What Luxon and his colleagues have seemingly failed to appreciate is that all the pressure is on them. As the largest party, they come, not with all the cards in their hands, but with a very large clock ticking loudly in their ears. Covid and a cost-of-living crisis have made New Zealanders ill-tempered and impatient. In the minds of many, the wait for a new Government has already gone well over time”.

It’s now five weeks since the election. But there is talk today of an agreement being reached, perhaps on Sunday. But it could take much longer – especially if the three parties take the offers back to their respective parties and fail to get their immediate sign-off. We already know the big policy sticking points have been over tax and a referendum on the Treaty. These will be the big issues to watch out for, to see who has compromised.

Hooton says today if the minor parties aren’t happy with what Luxon offers on tax and the Treaty, they will be happy to have another election and campaign on those issues – which is likely to only make them more popular.

Then there are the portfolios and baubles. All parties deny these are big issues, but they always are crucial to the minor parties. And they might prove to be a big headache for Luxon. Who does he give Deputy PM to? And Peters is rumoured to have demanded the role of Attorney General, in charge of his old foes the Serious Fraud Office.

Such dilemmas would tax even the best negotiators. And in Luxon’s case, it might well defeat him.

 • Dr Bryce Edwards is Political Analyst in Residence at Victoria University of Wellington. He is the director of the Democracy Project